Mumbai: The Bombay Stock Exchange (BSE) declined for the third week in four, shedding 1.5 percent on Friday to its lowest close in nearly five months, hit by continuing foreign fund outflows, while the near-term outlook was uncertain.
Soaring inflation and rate rises are starting to hit corporate margins in India, tempting more foreign fund managers to slash holdings in favour of markets that can better capitalise on the global economic recovery.
The 30-share BSE index dropped 3.2 percent this week and is down 10.3 percent so far this month, with foreign funds pulling out about $755 million since Tuesday as an improving US economy drew investors away from emerging markets such as India.
The index is on track to record its worst monthly decline since October 2008.
On Friday, the banking sector index dropped 1.1 percent, while the auto index and the realty index fell 3.6 percent and nearly 5 percent, respectively, on concerns more rate hikes by the central bank were on the way.
The main index fell for the third day on Friday and closed 1.54 percent, or 288.46 points, lower at 18,395.97 points, its lowest close since Sept. 3, 2010.
Only eight of its components closed in the green.
"I think the recent decline is overdone. There are issues on the domestic front, but a lot of it is already in the price," said Shishir Bajpai, senior vice-president of IIFL Private Wealth.
"The long-term India story remains intact. These are just short-term speed breakers on our way ahead."
The market breadth was negative with almost five shares declining for every share that advanced on the BSE, on an average volume of 365 million shares.
The 50-share NSE Nifty shed 1.6 percent to 5,512.15 points. Its relative strength index was at just above 30, indicating close to an oversold position.
"Technically, the market looks oversold and a dead cat bounce is not ruled out right now," said Arun Kejriwal, director of research firm KRIS.
"That said, we have been trading below the 200-day moving average since yesterday. If it remains below this level over the next couple of sessions and we fail to recover, a sharp selloff could again happen."
Energy giant Reliance Industries led the decline, with a 3 percent fall to 914.50 rupees, its lowest close in 15 months.
Auto shares such as Mahindra & Mahindra, Tata Motors, Maruti Suzuki and Bajaj Auto fell between 2.5 and 4.9 percent as higher borrowing costs are expected to squeeze consumer spending.
Top lender State Bank of India and mortgage lender Housing Development Finance Corp shed 1.3 percent and 2.8 percent, respectively.
HDFC Bank bucked the trend and closed 0.3 percent higher, a day after the country's third-largest lender posted better-than-expected quarterly earnings.
State-run explorer Oil & Natural Gas Corp was the top gainer amongst Sensex stocks and rose 1.9 percent. After market hours, it reported a 132 percent rise in its quarterly net profit.
The company had said late on Thursday, it had discovered shale gas reserves in West Bengal state in eastern India.
By 1029 GMT, the MSCI world equity index and Thomson Reuters global stock index were both trading down 0.3 percent each. The more volatile emerging markets index shed 0.7 percent.
Stocks that moved
* JSW Steel extended losses and slid 7 percent to 897.70 rupees, a day after the country's No. 3 steel maker said its consolidated net profit dropped 32 percent, hurt by higher cost of production.
* Air conditioning firm Blue Star slumped 11.6 percent to 349.30 rupees after it said late Thursday its December quarter net profit fell 47 percent.
* Dolphin Offshore declined 3.1 percent to 181.40 rupees after the offshore drilling services firm said its December-quarter net plunged 76 percent.
* State-run lender Allahabad Bank fell 4.1 percent to 201.80 rupee, after its December-quarter net profit rose 21 percent but lagged street forecast.
Main top three by volume
* Midvalley Entertainment on 10.4 million shares
* Indiabulls Power on 10.2 million shares
* Unitech on 6.7 million shares
Comments
0 comment